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tv   In the Loop With Betty Liu  Bloomberg  December 16, 2013 8:00am-10:01am EST

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business finally. it agreed to sell its jet leasing unit. the price is $5 billion. elon musk is getting ready to sell tesla cars in china. it tesla has unveiled its chinese website and is inviting customers to put down deposits. cost $100,000 in the united states but it will cost $200,000 in china. the price of privacy is on our radar today. your face print could be a huge tool for marketing. there are companies drafting facial recognition code. the congress department will meet with companies in february. it's an interesting potential but also so many scenarios we
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have not thought about. >> apple has a patent for face recognition on phones. that got their thumbprint on the model 5s and they have the idea of scanning faces for security. tore are interesting ways employ this. >> it also is a privacy concern. >> it raises concerns. is looking at this. privacy is a big issue. >> it is, you mentioned the retailers will set at the table to come up with these voluntary standards but privacy groups will do this as well. the commerce department will bring together the retailers but alsoaclu and they will meet in february and they will come up with a code of conduct by june. the technology we are talking about -- remember the movie
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"minority report" in 2002? it portrayed a world where cameras in public places could read public places and target ads to that individual. we are not quite in that world just yet but the technology is there. we have been talking about companies including apple. cameras can take better pictures in public places, geo-location technology is everywhere in internet giants can match photos to people like facebook. we talked to one of the pioneers of the industry and he calls it a disruptive technology and the perfect storm. >> the tagging technology that facebook has launched using face recognition is a game changer to some extent. as more and more people start putting images of their life on facebook and automatically creating a database, it allows you to search and retrieve and
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create links. be big business. one research firm estimates the global market for facial recognition products could reach 6.5 oh yen dollars by 2018 but privacy will continue to be a concern and any regulation could affect that number. >> how does this work? >> it's as simple as a fingerprint. they look for certain things within the face. thedentifies landmarks like eyes and nose and mouth and starts to look for certain things that are unique. the database works like a fingerprint database. fingerprints count the number of points and the same with fickle just facial recognition. >> any tension at these meetings predicted? >> you will have groups like the aclu sitting down wit groups representg reilers.
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the retailer priority is that any sort of regulation that gets put in place does not put a block on technology being developed. for the privacy groups, are people going to be able to opt into the technology? will people be able to be anonymous in public anymore? >> you see the companies starting to offer some of these things saying it's for customers who voluntarily opt into this, trying to put that concern out front as opposed to making people worry about it. >> as we have seen with any sort of internet advertising, the lure for the customers are deals. if you opt in, you are more likely to get an ad or deal. >> thank you. google is on a shopping spree in the robot is ms.. boston dynamics bills robots.
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they are not saying how much google is paying for the company. this is the eighth robot company google has bought in the last six months. they plan to honor the current pentagon contract that boston dynamics has but will not go after further military contracts. if you don't want to run, you can fly. the aig ceo is bob ben moshe a. he has agreed to sell their plane leasing unit for $5 billion. aircap holdings is the name of the company. after a group of chinese investors missed a deadline, repeated deadlines to buy the
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leasing unit, he has been looking to sell it. aig is focusing on its main business of insurance. lastly, the aig chairman spoke to bloomberg television. it's a greatgh company, it's not a good fit with an insurance company balance sheet. it's a very capital intensive business like that and does not belong in an insurance portfolio. we love the company and the earnings but we will get on with selling it. >> bloomberg news has been on the story for quite some time is ourning us now reporter covering this. >> this is a tough thing to sell with lots of planes and that. over the last year, they have been working to sell to the chinese. they could not get it done. >> wasn't part of the problem that the planes were older? >> yes, they had a series of
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write-downs on those planes. >> how good is the business? downs,cause of the write- it has not been possible this year. it feels like the future in leasing, people are flying. >> it seems like it's an intriguing business. is it a growing business? >> there is a lot of demand for air travel particularly in china. fora was there everpoint where they decided not to sell it? always the possibility they would sell it to a foreign investor? >> they have been working to just get rid of it and an ipo was a possibility. it seemed like over the last year, they wanted to get it off their balance sheet. with?at is aig left
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done selling these non-core assets they have accumulated in the years before the crisis. >> this is the last big 1 -- does that mean a change is afoot at aig? they are really focused on insurance. they have been bulking up for life insurance business. they have made some moves into international life insurance. >> why couldn't the chinese and aig get together? was it on price? >> it seemed like the chinese could not come up with all the money. >> this has been going on for a long time? >> about a year. >> was it a situation about regulatory issues in china? it seems like an unusual business for china. >> that's right, it's a tough deal to get done.
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it has a lot of debt and i think that made it harder to close. >> thank you so much for joining us, zachary tracer. we will be all over this story about aig selling their aircraft leasing unit. theofficials have argued inability of congress to pass a budget is holding back the economy and making the central bank job harder. congress actually passed a budget or at least the house did. it makes the central bank job harder as well. michael mckee is here to explain. >> it's a new dilemma. company haveand been urging congress to change their policies. now that they have, it may force its- the fed to change policy. for the past two years, but that is been telling people that went on implement gets to 6.5%, we will talk about raising interest rates. the forecast is we will hit that level in mid 2016.
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awayloyment benefits go next year and could screw things up. workave to be looking for to get benefits. there are about one million people still getting the emergency benefits which extended coverage for up to 99 weeks. if they don't have to be looking for work anymore, they might just stop. if one million people drop out of the workforce, that would lower the unemployment rate immediately by as much as half a percentage point. alreadyployment rate is at seven percent. we could see 6.5% next month. what will the fed do? they might change the threshold and that raises questions about how worthwhile their guidance there -- their guidance is. >> that does seem to be a problem. >> communication is not been their strong suit.
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anet yellen has been in charge of that part of it. ben bernanke said the fed could begin tapering by the end of this year. we got to that unemployment rate last month and this has to be factored in considering the wednesday meeting so anything is possible. thei was reading about janet yellen comments about gold suggesting that she has an understanding of the role of old and bernanke was not up on it. is there any suggestion that we will see any serious policy indications anytime soon? >> not in terms of gold. the central bank -- ben bernanke understands the hyster role of goal but he cannot figure out why it goes up and down these days but very few people can. people want toys see it as a store of value but they will not make policy based on it so no return to the gold
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standard. >> that would be a good headline. >> thank you, michael mckee. there is another headline -- my book is out today. i actually had a copy for you. i will bring it to you in the next hour. i talked to some of the big bank ceo's. the book is called "work smarts." i got advice from some of the biggest ceo's out there and what itmon talked about is like to be a ceo of a major corporation. he said a friend of mine became a ceo of a big company.
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some insights there. >> no longer being able to whine. >> i'm sure people will read into that. >> congratulations on your book. thing someone can ask is when your book is finished but you can actually celebrate. >> we will have more from other ceo's and you can read excerpts from the book on bloomberg.com. coming up, charter communications gets ready to make its move. the cable company prepares to make an offer for time warner cable and we will talk about that and do you think your has -- your kid has what it takes to make the big leagues? you can get some one-on-one coaching from the biggest names in sports. there is a company that can make that happen. we will talk with the former party boy and broker who wins
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a new leonardo dicaprio movie, "the wolf of wall street." ♪
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>> you are watching "in the loop" on bloomberg television, streaming on your phone, your tablet, and bloomberg.com. mutual funds are headed for record withdrawals this year with speculation mounting that the federal reserve is is preparing to reduce bond purchases. able have pulled in early 2 billion from their funds in the last week. is the u.s. economy recovering fast enough to turn them around? welcome back to "in the loop." these withdrawals are a big
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deal. how do you manage that? >> it's a challenge. we are first and foremost trying to keep our themes and strategies in place to match the redemptions. we keep a little more cash on hand and keep focus on what we want to extract value from the marketplace. it is a bit of a challenge. year have we seen such huge withdrawals? bond market isal a retail oriented marketplace and retail investors were earful of a rising rate environment. it is plenty of literature like the great rotation from bonds to equities. >> didn't they get spooked by the detroit bankruptcy? >> that has overshadowed the marketplace. those are unique situations. detroit is a set of circumstances that is apart from the rest of the economy. >> when you look across the landscape, are there other detroit's and stockton's where
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there is tremendous financial problems? >> the fundamentals are much better today than where they were a couple of years ago. the landscape is uneven but there are challenges which are fiscal and structural. if you can navigate it well, municipal ons -- bonds are cheap. >> there are some cities you might want to invest in and one of those cities that people of talked about a chicago. is chicago experiencing the same problems that detroit is? i don't think chicago is on the verge of bankruptcy but they have huge pension obligations. last month, we talked with the chicago mayor rahm emanuel. this is what he said. >> i have done three budgets in no propertyalanced,
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tax, sales tax, or gas tax increases and we eliminated the employee head tax. it, we eliminated it and are structural deficit was taken down by 2/3. i believe that's the foundation laying for pension reform. >> that's the same dress i'm wearing today. that,s he been able to do not raise taxes and try to balance the budget and, at the same time, try to fight the unions and bring down the pension obligations? >> chicago is not detroit. the unemployment rate is higher than the average in the nation is well below where detroit is. chicago has similar challenges. have been grappling with these imbalances every year. they have been using stopgap measures which is non-recovering measures. we like to see the expenses
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match the revenue in a sustainable manner. , theension situation pensions are poorly funded. it is about 35%. it is shy about $19.4 billion. rahm emanuel has put together a plan and that plan calls for the cost-of-living adjustments to be addressed if not suspended and employees and employees to pay more themselves and increase determinants and define the contributions. that is playing out throughout the u.s. in terms of pension reform. we see those elements in all pension reform. >> where else have things gotten better the may have looked like problems two years ago? >> three years ago, every conversation we started was will they or won't we? in california, they address their issues. as a california resident, i will say we did.
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>> they have cut spending and raise some revenues. fatigue had not settled into their budgets. that is a great example of how public policy can change fairly quickly. >> thereof also been some big -- there has also been some big revenues. >> california's revenue cycle is amplified by the business cycle and the high-tech area within california is a growth story within that state along with some of the housing areas that were hit pretty hard. >> thank you for joining us, robert amodeo. ultimate, it's the present for that sports fan who has everything, having an nba star show up to play hoops in your driveway. we will talk to the guy making a business out of creating a dream for you. you can live like the " wolf of wall street." we will be back. ♪
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>> you are watching "in the loop," on bloomberg television, streaming on your phone, your tablet, and bloomberg.com. good morning. it is 26 and is passed error which means bloomberg television is." equity futures are higher after a dismal week last week and stocks. we are higher ahead of the fed meeting that starts tomorrow and again"on the markets" in 30 minutes. the european area continues to recover from its record recession. factory output grew. germany, it reached a 30 month high but france fell to a seven-month low.
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sprint is considering taking over t mobile. antitrusthecking out complications. tesla is preparing to sell its high-end electric cars in china. muskompany owned by elon launched a chinese website this morning. they are taking pre-mortars -- pre-orders for the model s which is expected to be available in february. i imagine there could be some demand given how much the chinese love luxury cars. >> the deposits have helped tesla fuel the stuff they are doing in terms of development. it is amazing they are taking deposits on the model s when they don't expect to be in full production until the second quarter, june of 2015. deposits is something the giants could not manage it yesterday.
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i was rooting for the giants. please help the seahawks and the 49ers. what it does not seem possible. payone might be willing to top dollar to spend quality time with eli manning. company out there that help that happen. suzio represents coaches and athletes. tim hardaway has signed on as well as roger clemens. tiki barber was a cofounder of the company. this is an interesting business. i am a recovering sports writer so i watch athletes struggle with how to deal with fans per you figure out a way to get them closer. we have built is an
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online marketplace where the public can book professional athletes and sports figures and coaches for experiences. you can go to the site and search over 1400 athletes from across the country. you can see who is available in your area and what they are good at and how much they charge. range?t is the price >> the average price is $1400 per experience. >> what is a popular experience? >> one is called a game watch. financial advisor bookedtiki barber for a game watch event. it means you are sitting in a bar or at home and watching football and you invite 25 prospects with tiki barber. these events can create an atmosphere where you can
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actually get your clients to spend time with you. when have been amazed people love stuff from athletes like autographs and experiences. is there resistance from athletes to do these things? >> there was resistance when we first started the is miss about posting pricing. that was uncomfortable that we felt it had to happen in order to have an upfront market lice where consumers could have a positive buying experience like any other online marketplace. >> who are the ones that are most popular? >> some of the names you already mentioned. tiki barber is one of our cofounders and is most often booked. tim hardaway is in miami and roger clemens came on board a couple of weeks ago and are most popular current player is
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mohammed wilkerson. prevent other clients from directly going to be athletes? is the reason we built this because that is hard to do. most people have no idea where to start to book an athlete. agents are focused on contracts and so forth. the agents are not around at that point? >> they cannot find them and that's why we have a team of people hunting down these retired athletes to bring them on. it's a lot of work. building a network of people who can help you infiltrate each athlete community across the country. >> what's your background? -- i was act ground with seamless.com.
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i happen to be a big sports fan. when i was presented with the opportunity to join this country, -- this company, no- brainer. alumni of certain places a big draw? >> absolutely, stars that are not known at the national level are the biggest hits on college campuses. i am a giants fan. big ron dane fan. >> what has been the strangest or weirdest event you have gotten a request for. ? >> i don't know how strange or weird it is but i think it's really cool. we had jr smith booked to attend a bar mitzvah. he showed up and the bar mitzvah was held on a basketball court
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and he lifted the 13-year-old boy over his head and everybody was freaking out. >> and then he gave him tattoos? >> we thought that was really cool. >> sounds like a good idea. >> thank you very much. up, we put u.s. surveillance under surveillance. plus, our special series, the 12 days of bitcoin that lets you but the virtual currency into your retirement account. the number of companies buying back their own stock is higher than ever and we will take a look at what's behind this trend. stay "in the loop turcotte ♪ ." ♪
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bitcoin is ever a favorite subject these days.
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can you some into your retirement account? you have been digging into a fund? >> first of all, i have been living the bitcoin dream for the last week. >> you look like it. week, i started reading a little more about how you can invest in this and i saw an incredible headline about a retirement account that accepted bitcoin investments. and i have been talking and he has been active in bitcoin. he started second market which traits private shares -- which traits private shares of soon- to-be public companies. it was made famous wide the facebook ipo but they have been
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active in other ways. >> what did he say? >> he started the it coin investment trust. it raised about $70 million, 90 people have invested in it. accredited be an investor or an institution in order to invest in it. just like second market but there are ways to get in through investment trusts. several financial institutions allow people to invest in them indirectly as long as you invest a minimum of $25,000. it's possible. >> by the time you retire, will bitcoin be around? >> barry makes the point that this is a risky investment. it is risky. you will lose all of your money but ward -- or it will be a meaningful return.
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it's highly speculative and if you don't know this, you should not invest in it. >> it does not make sense. bitcoin you put your into your retirement account which you should be investing in assets. >> that is the shocking part. thati saw the headline said fidelity will allow investors to have bitcoin in their ira's, my head almost exploded. they have reversed that. if you are a main street investor and you don't know anything about bitcoin, maybe your broker says you should put a portion of this in your retirement investment, the main street investor loses out and the broker makes money. >> there are good tax implications but if your advisors says that to you, you
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should look for a new advisor. >> i can't wait for day seven of bitcoin. >> i will show you some of the stuff i did over the weekend. i went grocery shopping with it coin. i went to a bar and used bitcoin. i went to a dog walker that except bitcoin. i traveled with bitcoin. i took a trip to spain. it was an incredibly eventful bitcoin weekend. >> we want to hear about your party thursday night. >> i went to a gathering at webster hall on thursday night. a band playing next door. it was a bitcoin meet up. we were trying to have a discussion with 50 or 60 people. it was really just people drinking beer at a bar. i met some great guys and i will probably go back this coming thursday. they are all over the place.
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there is one monday in union square and one on tuesday. >> you are living the dream. >> 2014 should be the year of bitcoin. to catch messenger view with founder barry silver this afternoon. >coming up, we have to look at and how many people are buying your data. we have an inside look at a part in youth in the new movie "wolf on wall street. " ♪
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>> all day on bloomberg, we are looking at the price of privacy. obama has received 40 recommends
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tions . phil mattingly joins us now along with tom keene. the question remains, what will happen to the manners of everything in motion, edward snowden? of hist know the extent damage. >> u.s. officials have been clear since edward snowden was charged in june that they want him to come back to the u.s. from russia and face charges. onever, something discussed the periphery came out of the open last night when a top nsa official spoke with "60 minutes." >> my personal view is it's worth having a conversation about. i would need assurances that the remainder of the date of be secured. my bar for those assurances would be very high. >> he was talking about amnesty. top u.s. officials is not
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something they are high on. it underlines the fact that they desperately want to figure out a way to not only know how much he has leak but how much he still has and can release. >> i want to bring in tom keene. you talk to bit on this issue on your program. what i would say is that all the rules are changing. itgo into 2014 and whether is washington or silicon valley or the corporations, they are trying to find out what the manual is. information and new information, nobody knows the manual. or get about washington and politics. >> the fundamental issue being figured out now is whether the government should be able to collect everything and sort through it later. and whether that's appropriate. weekend 60over the
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people are being investigated or watched right now? there is no one who believes that. when this officially broke, u.s. officials were very clear that their biggest concerns were the companies involved in this. what we have seen from the tech industry has been amazing. these were issues they could not talk about and now they are coming out together, united, pushing the government to help them out. they are seeing business impact and customers angry. these are serious issues they will have to face next couple of months. wax who will act first -- >> who will act first? histhe president got recommendations on friday and will discuss those publicly in january. he has to make a choice. congress will act. the momentum on the hill, when lawmakers come back, metadata
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collection, there are a number of lawmakers who want to cut away that ability. the white house and nsa don't want to lose that so the president might have to act first encounter that. >> we have had a number of companies talk about the impact this has on their ability to sell in europe and losing business. for the this work out tech companies? we saw it a couple of weeks ago when they came out together in a letter to talk to the administration. they need protection and have worked behind the scenes without having been able to talk about it with the u.s. government for years to help with these programs. what they need is the administration to do something to try to restore that confidence. what the administration does in january and february and how they respond to this report last week in what they do to cover these companies going forward will be huge from a business side and a consumer side.
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the companies have made it clear that they need help. if the government does not do that to them, they will have problems. >> thank you so much. coming up, takeover talks continue for time warner cable on the bid for the cable giant. it could come as early as this week and we will talk about the price tag. ♪
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it is time for today's bloomberg big number which is of5 million, the price tag the rights to "the wolf of wall street -- the price tag of the penthouse from "the wolf of wall street." it might be out of your price range.
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i think you can buy it if you dangle someone over the ledge. >> it depends if you want drama. street" isof wall one of the most anticipated movies of the year. this is the stuff of legend. bloomberg sat down with the subject of the movie. >> my name is jordan belfort. i made $49 million when i turned 26. it has me up because it was three shy of one million per week. in the movie, i hope they get a cautionary tale. >> as to what not to do. when i was at the bottom you -- i was not as
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bad as everyone thought. >> greed, for lack of a better word, is good. fictional characters are sexy as hell. people bought into that notion. they did not focus on who gets hurt. it's not true. i was not focusing on the reality. i'm not making any money on the books or the movie. the only way i will is if everyone gets paid back but until then, i don't want to make any money. as a broker or trader, you are not creating anything. you are trading off of the ingenuity of other people. to think there is nothing tangible attached to
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your profit and you have an emptiness to the money you make. decided to go in that direction, i would hopefully counsel them. >> for all the drugs he took and the fall and the convictions, he looks pretty good. >> the book is spectacular. i have read about half a dozen books of money laundering and that is one of the best. is glamorizing the crazy stuff he did. taping the money to the woman is real. andas flying by private jet wearing the money and taping his mother-in-law up with money. it's an incredible book about the sleazy part of wall street and the securities fraud that continues to this day. it is a revealing book. >> it feeds into the public's view.
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they feel like wall street is this. michael douglas and the movie is what wall street is all about, they feel. we were talking about the companies that are not out to make great companies but have stock that goes up. >> it is 56 past the hour. bloomberg television i "on the markets." market is rebounding after one of the worst weeks of the year last week. "on the markets we are" again 30 minutes. your personalre information can be shared and your identity can be bought on the black market, we will tell you how much you are worth and where privacy is going. why more companies like cisco are turning to stock ibex to reward shareholders. ♪
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," with is "in the loop betty liu. >> welcome back to mow this is what we're working on. orders have been rejected for the second month of the rope. they fell short of s&p. aig is selling off its aircraft leasing unit, the price is five early dollars cash and shares. google has bought its eighth robot company. cyborg tech in the financial growing, as more goes
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on the market. how's expensive is it to resell information? >> not very much. stocking really little -- shockingly little. if you look at something called oflz, that is your full set touristic's online -- characteristics online. your full name, your address, your e-mail, your data bird, and her social security number. it might include your account information, credit card information, other types of credit credentials. . like rede for sale cardnumberless -- credit numbers, and when he about these
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, four dollars each for a visa or mastercard number. >> what it tells us is that the , the thieves are not going to use it, they are going to resell it. >> in some cases, yes. when you're talking about who might be buying and selling this information, you have the hackers on the one hand, and on the the other hand you have various criminals frequently internationally. there was one case earlier this year were the hackers were in russia, and the sale was going on there. -- 80 800,000 individuals bank accounts. >> where else could they be i your data that you don't realize? was an interesting
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situation in new jersey, a settlement between the state and a data mining company called d d aum, which is also doing deal with fei company called axiom. these companies are not buying and selling your information to steal your identity or the whatus purposes, or just to do analytics on your history. they tried mr. of you going to particular website, they try to figure out what your trends are, what your characteristics are as a consumer. they then sell that information to somebody else. in this case, in the case of new jersey, the state alleges that what the company was doing was illegal, and then they reached a settlement as part of this ear to the company said we will not be doing this anymore. that is the case where it is seemingly more innocuous, and
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yet, legally they're still trying to figure out where all of this falls. >> thank you so much. this is your favorite store, moving and shaking this hour, esla founder elon musk is expanding into china. he will start selling them there in february. buying a test lead china will not be cheap. imposeill in pose -- import duties, and it will cost 200,000 dollars in china. one problem that tesla still has to overcome is that it needs charging stations across china. that is kind of a big problem. >> so your tax dollars, hard at work, to sell a 200,000 luxury car to china. >> they have been paying that back. >> the government subsidies that
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they got to build, and they are offering different puzzles on the model excavation large been pushed back in delivery. they will not be in old production until the second quarter, june of 2014. bighina is going to be a market for tesla, but also for any luxury car maker, right? notion, that this is a luxury car. the average cost for tesla is not only well over $100,000, and is also gone up a lot in last few months. they've quietly raise their prices over there in three months. >> all right. >> all right, interesting stuff. the number of companies buying their own stock to make up for more of the u.s. equity market is more than ever before. this is an interesting one, because with the announcement by bucks about often companies would not do them. tely, they have big >>
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it is cash and record low interest rates. the buddies are sitting on and pressed -- unprecedented cache file, so that is where most of our big activist stories this year have come from. the big investors like carl icahn command given einhorn, clamoring for comedies to push that but that cash to work. the record low interest rates, the irony is that it instead of deploying that cash, what companies have done is raised in an president and amount of debt to finance those share buyback. apple, for example, this year did its first offering since 1996. its first bond sale since 1996, that was larger on record until -- largest on record until rise and stole the thunder. >> the one that gets me is the companies that announce buybacks, but they share count still go up.
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this type of environment, that is another game revenues can play eric >> the data show that comedies that do the buybacks are outperforming. 2009, cubbies of will focus on buybacks have risen 270% compared to as a these 190%. they are outperforming, i spoke to a lot of money managers, they think the trend is going to the debut. companies have not spent the cash, so they still haven't, they're going to be under pressure to return it to shareholders. the other piece of it is valuation. we've seen this big run up and valuations in the stock market this year, the sbs now trading at a ratio of 16.7, but if you compare that to historical averages, it is still pretty cheap. >> thank you so much. berkshire hathaway ceo war and buffet. he was interviewed as well for my book work smarts, which by the way have -- i have a copy
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of. >> and is out, is a physical book. it is out today. i reviewed several ceos for their best career advice, and warren buffett said that when he buys other companies, he tries to buy companies were the have a feeling about the company, and then it's up to me now to destroy that feeling. i can't put into something that does not have it, but i can destroy if it's not in there. biggestbuffett, the day of my year is when the annual letter comes out. it is a wonderful thing. >> i have heard nobody ever say anything other than they love
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reading your letters, because they're pretty much the irritated me of write an annual letter to a roach a little note pretty much the highlight. i didn't write an annual letter, but i gave you a little note. we're going have excerpts on bloomberg.com. >> i can't read this on tv. >> the wealthy business only in the ukraine could play a key role in the battle for the future of the ukraine. we'll have details on that straight ahead. frenzy around time warner cable is heating up. we'll hear from some amigos worked with all the major cable company's about what a ceo could mean for the -- what this deal could mean for the industry. ♪
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>> one stock investors are more nurturing, time warner cable -- monitoring, time warner cable. is excited to be comparing an offer letter am a which could come as early as this week. someone who was worked with all the major cable companies, including time warner cable, cofounder and ceo of -- chairman of media morph. also alec sherman is with us, and he broke the story about the possible bid for time warner cable coming. let's start with you on this. what do we know so far? >> well we know so far is that charter is preparing a so call bearhug offer. the price will be less than $135 per share.
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currentlyr cable trading at $130 or 131 dollars. it will be around that point. we do not know if it is going to be cash. all the m&a speculation has really driven up -- >> they want more cash. you have worked with several of these companies, you know about several mergers and cable land, so to spade. why now would charter to make this bid? >> i couple of reasons. liberty groups john malone bought 37% off charter earlier in the year. outside the u.s., he already has the largest amount nation of cable assets, and charter can be the lead for him to gain market share in the u.s.
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that is one big driver. the second big driver is that if you look at performance at time warner cable, it hasn't been that good. in the last quarter, they lost subscribers, and they missed the earnings targets. and looked like it is a pretty good target, and a very good asset for charter to acquire and expand its footprint. >> see just described a from a business. why is that a good asset to acquire? telecomar to the industry, we will see in. -- consolidation in the cable industry. even though i lost subscribers, the combined charter and time warner cable entity will have a lot of synergy. about $1 billion in cost savings, and a lot more market power in terms of negotiation with content companies. >> to that point, what is going in the underlying business of time warner cable? described it as a crummy business, that is only pat -- partially right.
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tv as is watching cable much as they used to be, that is true. the ratings are down, at times water cable loses videos and covers quarter after quarter, year after year. the broadband business continues to grow. that did not grow last quarter because of a dispute of cbs, but in general, more people continue to acquire their broadband service for the house as it is this past -- faster speed than anything out there. time warner cable can continue to charge more for broadband service, and going to businesses and hugging them up with faster spray bobbin of a that has been lucrative too. it'd just has not been the cable tv portion that has not been so good. like i agree with you. overall consolidation of the industry is inevitable the future of the video business is a bit uncertain. >> is there going to be other bidders here, are we going to
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start to see a bidding war? >> i am absolutely sure. when comcast acquired at&t broadband into thousand one, the whole thing took about five months. back then it was annual, time warner cable, they came into the bid, cox came into the bed, i'm absolutely sure that you will start to see others. >> the big question is what is comcast going to do at this point, because they are big girl in the room. they are sitting back and deciding at this point do we want to make a bed? can we make a bid for the entire thing? pretty bighas to be at this point. >> from a regulatory point of view, there is no restriction on the ownership. that was repealed a well back. it is going to be and issue from the antitrust point of view. i do think that a joint bid between comcast and charter is probably a good idea. it is going to be better from a
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geographical point of view because comcast can come in and take new york, can take some investment access. if your member the comcast the delaunay at time warner cable deal a few years ago, it was a key bit of software systems for the other one ones. the overarching issue is that the staining companies are not valuation of the smaller systems. it is not that difficult to do these types of system buys. letters,hey get these how long until charter decides that we will take it darkly to the shareholders? >> assuming that the bed is what we think it will be, they are going to want some sort of review. can they get a deal with comcast that will up the price level? if not, charter's next move was to go to shareholders.
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a key date, somewhere in the middle of january, look for charter and liberty to decide if they want to nominate their own slate of directors to theoretically get on this new company in time for proxy vote. the annual meeting will be in may or june of 2014. >> thank you very much. coming up, we're going to talk about the house of the nations richest man who might be turning the tide. an early christmas gift from some early -- wealthy backers. ♪
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>> we are just a few minutes from the opening bell. are you excited, i am. we are looking at the -- top 10
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trade you need to know about. ♪
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>> welcome back, i am betty liu. >> i'm cory johnson. >> it is 26 minutes past the hour, which means bloomberg television is on the markets. equity futures right now are slightly higher. we have scarlet fu with more. >> u twos are indicating a higher open right now. we had a mixed economic data this morning with the manufacturing numbers coming in weaker than anticipated, but industrial production eat on the upside. we also have gains overseas. european stocks higher right now after many manufacturing data over the region coming in better than the comments had connected. also, gold about little change to higher.
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investors waiting to hear on any word about what the fed will do about tapering the stimulants. we will be on the markets was given 30 minutes. >> we are waiting for what the fed will do. let's count down to the open with the top 1020 -- trade you need to know. number 10, bp, the global oil giant signed a 30 year deal to jointly develop a major investment into the arabian gas fields. the austin,ne, texas raced -- based chipmaker. these tips going to apple products, and are their biggest customer. >> number eight, harvest natural resources. the energy of any announced it is selling all of its interest
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in venezuela for $400 million cash. surged natural resources three percent on the news. >> at number seven is google, the tech titan is on a shopping spree. its latest acquisition was boston dynamics. which contract to the u.s. military is the eighth robot company google has bought in the last six months. l.s.i. logic. six exodus -- the acquisition is going to create a much better company. spend company offered to a billion dollars to raise its stake and a new indian pharmaceutical unit to tackle growing demand for medicines in the country. shares rallied on the announcement, they are not the highest of two decades. >> and number four, it is tesla motors, during ford's rollout
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and china. a month after opening a show room in beijing but they are taking pre-orders for the model s about the model x vehicle. number three, verizon. people familiar intel butituation, there you on the blocks. >> twitter, the microblogging site is seeing some action after stock was little slashed. >> aig, the insurance company agreed to sell its prime unit to the dutch unit or $5 billion in cash and stocks. this comes as aig looks to
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narrow its focus on this main businesses of selling life insurance and ridding itself of more than $20 billion of debt. we coincidently my have the ceo of i aig bob now on the phone with us. good morning. >> good morning, betty. >> how did this all come together? up to a certain point you were still looking at selling this to the group of chinese investors. >> as you know, we said that we to look ato begin other opportunities. we talked with several other institutions that were interested in purchasing either all or part of us. >> have we lost him? bob? is on his cell phone, so we will try to get him back. business, but it requires a lot of capital. that is interesting to see them pieceg off the last big
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of business. >> it has been a very difficult task for aig to sell this business back. huawei try to bob back on the phone, i want to bring in chad. is going to fall chippers ine fed january. how do you, but that? they're going to struggle he singled for a tapered gator, that is not going to be a that it has reacted positively to this nominee -- to this rate about of stimulus. there's going to be a transition time for the markets are going to pare back by 10% or 15%. that does not mean that we're going into a recession, we think that the economy is going to be growing at a two percent to 2.5%. the you -- european markets are
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going to gradually get better, and the global economy is going to start to improve. >> when i next week -- why not to next week? >> we think that they have to signal first. we think two to three signals by the federal reserve that is working. we have the on implement trends destined we have the employment trends that are in mproving, the housing is what isg, and you see happening with the equity markets, they tend to trend lower, and that is something of something of a concern for the federal reserve. and laois next rotations are low right now. they're going to do quantitative easing well into 2014, they're not going to stop until 2015. there does going to start has
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taken the market with a 10% or 15% pullback. >> consumer discretionary is one of the markets you like. scarlet fu looking at some of the subgroups in discretionary. >> is one of the most diverse sectors, it is made above the five industry groups from autos, meaning, and specialty retailers paid what is notable is that each of the five rooms have outperformed the broader markets since the bottom of the bear market. the question is, how much longer can this will probably continue? the sector trades at a higher &p 500.on than the s >> what part of consumer discretionary is attracted to you? we're looking at walmart renault, we think that that is a buy, we think that with dividend you can get a total would turn around nine percent.
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you get quality and consistency that everyone is looking for. >> y? a they just worried about what is going to happen in the markets, or do they think it is a safer play that way? >> it is a safer play, also you are starting to see the consumers, and dd leveraging cycle abate. you have hold the mortgages actually go up since 2008. evidence that perhaps the deleveraging cycle is starting to decelerate, and that's all is well for large retailers. >> explained the walmart again to me? a 2.5% yield, we're looking at roughly six pe return -- to 7%
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return. this is something you could own for many years, and you do not have to worry about the daily trends, or the monthly same- store sales. >> thank you so much for joining us. of aig back the ceo on the phone. are you there? >> merry we we do, maybe we don't -- maybe we do, maybe we don't. the we not understand are in 2013, why cannot we get cell phones to work? , but ining to try again any case, let's take a break. rent is really expensive. ukraine an the u.k. rai range on. -- rage on. stay in the loop. ♪
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>> it is time for our look at the top articles on linkedin. this is interesting on one of your top five stories that are trending right now, it is about harvard. a harvard study that looked at rent. thate study showed about one in four people were incomeabout 30% of their in rent, and now it is about half of the people. quick that is horrible. it provides from people spending anywhere else in the economy. quick incomplete -- in places like new york, it is normal to be a little more high. but people are spending a little us on things like food because they need to spend on rent. the housing boom and the housing bust.
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when it happens in the home prices really high, and so they turned to renting. and there were a lot of foreclosures, so that caused a really similar thing. it has become unaffordable. >> you wonder if this means that other things could happen to solve this? there was a great piece about the design in silicon valley. places forilding people to work at the company, because they cannot find housing. mayor bloomberg also talking about these micro-apartments in places to try to provide housing for people with a cheaper cost. >> laces where you need to really attract talent, there's only so it you could do by paying people more. we a people who really want to work at a company, but the rents have become so high, or the housing prices have become so high, you have to come up with micro-apartments, or making work hours more flexible so that if people really need to live far away from the company dominic is
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to work. >> the way companies -- it is a article, companies moving their operations to distant places to get more workers. >> it is individuals who cannot afford iraq rent, but it is also companies as well. >> that is true. there are people who are living overseas who are already living in micro-apartments for rent is so much higher. the housing itself is a topic -- segment of the population. >> might think my first apartment was a micro- apartments. [laughter] the big ideas series that is launching. interesting big idea for next year.
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the big entrepreneur year? >> yes, our influences, the people who talk about their industry and dig about the issue that is going to have the most in 2014. he is a big booster for entrepreneurship, and an unknown converter himself -- and an entrepreneur himself. costs and barriers have gotten so low because the software that is available for accounting and hiring and everything else. companies using the cloud, using data services -- >> it is a very different world that companies are getting developed in now. >> people are looking into not just waving to make rough it, but wait they can improve this a consensus around them.
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i was very thought interesting, about how the cover but website got screwed up because of the government's approach to software. -- piece ond about advice about the software industry. >> they threw it over an invisible cliff to the coders who never got any feedback or have any say on why the software works. we're talking about him or just added you where you have small engineers and coders about working with monumental changes that are based on the things that they see that people need. >> he also points out that he did not get to be an internet millionaire with other do-
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gooders on the internet upgrade. stuff from linkedin, as always. thank you. while the consumers have warmed now they are investing in ski jackets. and as that time of year, banks are waiting there annual bonuses. ."ay with us "in the loop ♪
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>> time now for the global outlook. nelson mandela was laid to rest on sunday. 4500 people attended the service. the burial marked the final event of a 10 day mourning. for the country. london bankers are feeling a boost in this holiday serieason.
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they are checking up 44% rise in bonuses. morning for montclair. shares of the luxury ski wear maker surged 45% above its offering price on the first day of trade. spoke about the brands overseas. >> the market for us is quite good, we think about our store in numbers. hong kong, the weather is very successful.y losave another store in angewhere the weather is very hard, and is very successful -- hot, and very successful. >> moving from skiing to the ukraine. the deaths continued over the weekend as the battle for the nation's future rages on. many wonder who will win the
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support of the nation cause wealthy business leaders. our european editor, rob. in terms of let allegiances, this is entry, because this is -- interesting, because this is an economic protest. very interesting. man is ar's richest good friend, and vitalizing those assets. a at the basic level, ties to thewith government we do not know which side they are going to be on. quick they are walking a fine line. they are very close ties to russia, to the ukrainian economy that depends on russia.
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>> how many people are close to -- listening to him? --he controls >> the people? >> the people want stability. they want to look west rate of the days of the soviet empire are gone, but this is that legacy playing out. mostly about social?s, or >> a little of both. >> there are the billionaires, and then there are the human beings. what about the human beings? >> they want political read them, and they want prosperity. the former soviet union but there was not a lot of prosperity, so they looked to the west.
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they put in a president that created economic chaos. they're looking for middle ground here. >> for those of us who open watching what is going on in the ukraine, there any indications on how it is going to play out? >> the billionaires have started to come out in terms of negotiation. putin has said if you side with the eu, you will have problems with russia. the two presidents of these two countries are having to governments -- ho compromise. story.s an amazing and it would be very interesting and jacob which would actually if the ukrainian president would step up. >> they're really only three or four billionaires known in ukraine. about $12.5is worth
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billion, and the next one down is about $3 billion. smallws he has this fairy minority in a place that he has to attend to as well. >> thank you very much. >> that doesn't for us today on "in the loop." weeku can catch me every day at 1:00 p.m., and 6:00 p.m. on bloomberg west. ♪
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>> it is 56 minutes past the hour, which means that bloomberg television is on the markets. about 30 minutes into the starting -- into the start of u.s. trading, and u.s. stocks are in download after starting off their worst week since august. ata we gotic id
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showed weaker manufacturing, but stronger than expected in industrial. to commodities in today's futures and focus. we're watching gold futures. the feds today meeting start -- and so the announcement on wednesday afternoon. greg used to trade futures on the floor. old? does that mean for g taper or not taper? taper, isor not giv already priced in? i like to look at the options market. and it is telling us, quietly. >> i need to send it back to betty for a special interview. >> all right, thank you so much. ceoave, as i mentioned, aig
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bob on the phone. finally he is back on a landline with us. quickly, i know we're talking hadt the sale that you have for $5 billion. what are you going to do with that cash? $3we're getting about billion in cash, and they are paying us and other stocks. >> it looks like we've lost them again. >> i'm going to toss it back to you. to talk about what gold are going to doug about this week. , are we goingrs
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to see a selloff? >> the data works much better when gold is going up, but it what it is going down like it is now it is just another reason for people to sell. you can get that short-term bouts. if you look at the last time over 15, that was the exact time you wanted to sell gold on those bounces. mike's something to keep in mind there. the consensus is everyone seems to think the color is goinghigher -- dollar is higher, but if it goes lower, it is good for commodities. will other commodities benefit at the expense of gold? >> what other metals or commodities might get more favor than gold? ok as copper, and it is trading on a relative basis as well.
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sell, inas a slamdunk 12.16.ge of 1260 -- at the traders short, speculators are or not very long, and commercials are not as short as they usually are. it is deftly a situation that is ripe for a bouts, and a lot of people are looking at. less, add on to the fact that products?ge traded "in the loop, the funds are flowing out of those right now -- if you look at the exchange traded products committee funds are flowing out of those right now. >> that is on the markets, we will be back with more checkups about market maker starts right now. ♪
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